Overview of Remote Deposit

Remote deposit is a system that allows a business or individual to deposit a check without actually going to a bank. This method is becoming more common thanks to advancements in technology and the legislation to put it in place. Here are the basics of remote deposit.

Remote Deposit

With remote deposit, a check can be scanned or have a digital image taken of it and sent to the bank. The bank receives the digital scan or image of the check and then processes it exactly as it would any other check. The amount of the check will then be deposited into the proper account, and the client can begin using the money as soon as the check clears. 

Who Uses It

The majority of customers that use this technique are businesses. Many businesses set up a scanner so that they can immediately deposit checks that are received from clients. This way, the business can improve cash flow and make sure that enough money is in their account at all times. Although most of the time, businesses are involved, individuals have started to use this technique more often in recent years. In the past, banks allowed only businesses to use this strategy. Now, several banks have opened it up to individual customers as well. For example, if you are a customer of a certain bank, you can take a picture of a check with your phone and send it to the bank in order to make a deposit.

Convenience

The major reason that many businesses and individuals prefer remote deposit is that it is so convenient. Instead of having to drive to the bank and take time out of your busy schedule, you can simply run a check through a scanner or take a picture of it. This can save significant amounts of time overall. In addition to saving time, it can help improve cash flow. Banks will cut off the deposits that can be made at a certain time of day. If a check is received close to the deadline, you can simply scan it and send it in and get the money in your account more quickly. In the past, you would have had to wait until the following day to deposit the money.

Issues

Even though this strategy is very convenient, it can cause a few problems as well. It is this concern that has kept many banks from implementing this technique into their business practices. In some cases, errors have been made because of the quality of the digital scan. For example, someone at a bank might have mistakenly thought that a check was a certain amount and thus deposited the wrong amount of money into an account. 

Another common issue with this type of deposit is that the bank does not always require a scanned image of the back of the check. If you are dealing with a two-party check, you could potentially cash a check without approval from the other party.


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